Financing ADU construction while buying your home

The Portland rental market is booming. ADUs are one option for turning your property into an income source while still living in the main home. Include the costs of ADU construction in your purchase loan to save hassle and money. The Portland Home Te

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Financing ADU construction while buying your home

Posted by Bob Broad on Friday, March 3rd, 2017 at 12:48pm.

The Portland rental market is booming. Portland publications raised alarms when the average Portland rental cost hit $1400 last summer. These days, average monthly rent for a 1 bedroom in the city exceeds $1500. Even as new apartment complexes open, demand for rental housing continues to grow on pace, so we can expect the Portland rental market to remain tight. A headache for renters, perhaps, but this scarcity of apartments is a great opportunity for home buyers looking to foray into property management.

Plan to build an ADU, or accessory dwelling unit, while buying your home, and include the cost of ADU construction in your home mortgage. The Portland Home Team knows the Portland regulations for ADUs, and can help you buy a property appropriate for adding an ADU.

One investment option is to build an additional home on an existing property. Accessory Dwelling Units, or ADUs, are complete living spaces under 800 square feet and less than 75% the size of the main home which can be built on residential lots alongside an existing home. ADUs are rising in popularity in the Portland area as homeowners see the benefits of building and renting out small homes in their backyards. The City of Portland is encouraging the trend by waiving Service Development Charges for ADUs, a $10,000 savings. Accessory Dwellings makes a calculator to help you see how adding an ADU can be a great investment.

Creating an ADU is a major construction project which comes with a sizable cost. Converting your basement into an ADU will run around $45,000, while a new detached structure may cost closer to $100,000. For home buyers, financing an ADU in a package with your home mortgage can make good sense. With Umpqua Bank’s All-In-One custom construction loan, for example, when you buy a home with ADU potential you can include the cost of construction or renovations in your mortgage, borrowing off the total value of the existing home and completed ADU. One loan, one monthly payment, one competitive rate, one new income source.

portland real estateLOOKING FOR PROPERTY FOR AN ADU?

The Portland Home Team will be happy to answer questions, recommend neighborhoods and properties and ensure you find the home that meets your needs!

- Portland Home Team: Experience. Excellence.

1 Response to "Financing ADU construction while buying your home"

Ben Kilfoil wrote: Hey! I was reading over some real estate blogs in the Portland area and saw this one. Very glad I did, I work with Jose, an investor and founder of Dynamic Real Estate Innovations. We work in the area and Jose has always loved the idea of tiny homes!!! Give me a call at 503-569-7779 (cell) and I can figure out how we can work together in the future. We could also get you and Jose connected to talk about tiny homes in the Portland market as an investing strategy!

Also check out our own blog for first time home buyers!

Posted on Friday, March 17th, 2017 at 4:22pm.

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